AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 4, 1999
REGISTRATION NO. 333-86819
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------------
AMENDMENT NO. 2 TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------------------
CHESAPEAKE BIOLOGICAL LABORATORIES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
MARYLAND 52-1176514
(STATE OF INCORPORATION) (I.R.S. EMPLOYER IDENTIFICATION NO.)
1111 SOUTH PACA ST.
BALTIMORE, MD 21230-2591
(410) 843-5000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
THOMAS P. RICE
PRESIDENT, CHIEF EXECUTIVE OFFICER
1111 SOUTH PACA ST.
BALTIMORE, MD 21230-2591
(410) 843-5000
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
COPIES OF ALL COMMUNICATIONS, INCLUDING ALL COMMUNICATIONS SENT TO THE AGENT
FOR SERVICE, SHOULD BE SENT TO:
RICHARD C. TILGHMAN, JR., ESQUIRE
PIPER MARBURY RUDNICK & WOLFE LLP
36 SOUTH CHARLES STREET
BALTIMORE, MARYLAND 21201
(410) 539-2530
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: AS SOON AS
PRACTICABLE AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT.
IF THE ONLY SECURITIES BEING REGISTERED ON THIS FORM ARE BEING OFFERED PURSUANT
TO DIVIDEND OR INTEREST REINVESTMENT PLANS, PLEASE CHECK THE FOLLOWING
BOX: / /
IF ANY OF THE SECURITIES BEING REGISTERED ON THIS FORM ARE TO BE OFFERED ON A
DELAYED OR CONTINUOUS BASIS PURSUANT TO RULE 415 UNDER THE SECURITIES ACT OF
1933, OTHER THAN SECURITIES OFFERED IN CONNECTION WITH DIVIDEND OR INTEREST
REINVESTMENT PLANS, CHECK THE FOLLOWING BOX: /X/
IF THIS FORM IS FILED TO REGISTER ADDITIONAL SECURITIES FOR AN OFFERING PURSUANT
TO RULE 462(B) UNDER THE SECURITIES ACT, PLEASE CHECK THE FOLLOWING BOX AND LIST
THE SECURITIES ACT REGISTRATION STATEMENT NUMBER OF THE EARLIER EFFECTIVE
REGISTRATION STATEMENT FOR THE SAME OFFERING: / /
IF THIS FORM IS A POST-EFFECTIVE AMENDMENT FILED PURSUANT TO RULE 462(C) UNDER
THE SECURITIES ACT, CHECK THE FOLLOWING BOX AND LIST THE SECURITIES ACT
REGISTRATION STATEMENT NUMBER OF THE EARLIER EFFECTIVE REGISTRATION STATEMENT
FOR THE SAME OFFERING: / /
IF DELIVERY OF THE PROSPECTUS IS EXPECTED TO BE MADE PURSUANT TO RULE 434,
PLEASE CHECK THE FOLLOWING BOX: / /
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
PROSPECTUS SUBJECT TO COMPLETION
NOVEMBER __, 1999
The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is prohibited.
1,385,751 SHARES
CHESAPEAKE BIOLOGICAL LABORATORIES, INC.
COMMON STOCK
-----------
This prospectus relates to the public offering from time to time of
1,385,751 shares of common stock of Chesapeake Biological Laboratories, Inc. by
the stockholders named later in this prospectus. We expect these stockholders to
sell most or all of these shares in the Nasdaq National Market. We describe how
these stockholders may sell their shares in the "Plan of Distribution" section
of this prospectus. We will not receive any proceeds from the sale of shares
offered by this prospectus. However, we will receive cash upon any exercise of
the warrants described in this prospectus.
Our common stock is quoted on the Nasdaq National Market under the
symbol "CBLI." On November 2, 1999, the last sale price for the common stock as
reported on the Nasdaq Stock Market was $3.25 per share.
BEGINNING ON PAGE 2, WE HAVE LISTED SEVERAL "RISK FACTORS" WHICH YOU
SHOULD CONSIDER. YOU SHOULD READ THE ENTIRE PROSPECTUS CAREFULLY BEFORE YOU MAKE
YOUR INVESTMENT DECISION.
NEITHER THE SEC NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR
DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR
COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this prospectus is , 1999.
CHESAPEAKE BIOLOGICAL LABORATORIES, INC.
Our customers generally use the products we produce for clinical
testing required for FDA approval. After approval customers market and sell
these products for FDA-approved medical uses, most often as drugs to prevent
or treat diseases. The nature of the ingredients in our products makes them
effective only in injectable or sterile form. Generally, the FDA has not
approved our customers' products for the same uses in other forms.
Our customers range from major international pharmaceutical firms to
emerging biotechnology companies. Since 1990, we have provided services on a
contract basis to more than 100 pharmaceutical and biotechnology companies.
After we perform our work, our customers take the products and either
continue the process of obtaining FDA approval or market and sell
FDA-approved products to the medical industry. Our mix of product development
work versus product manufacturing depends entirely on the contracts we have
at any given time. Customers contract with us for the following different
services at different times:
- production of development stage products for use in FDA required
toxicology studies and clinical trials; and
- production and manufacture of FDA approved products for
commercial sale.
In our manufacturing process, we derive biopharmaceutical products from
biological materials. The biopharmaceutical products typically involve larger,
more complex molecules than traditional pharmaceutical products, which come from
smaller, more stable, synthetic organic molecules. The products we develop and
produce are very sensitive to the production process. Even a slight variation in
processing time or temperature can render the product unusable. The complexity
and instability of biopharmaceutical products require specialized technology and
expertise for development, production and analysis.
Our primary development services are:
- research and development of sterile product formulations;
- test method development and validation;
- process design and manufacturing validation;
- regulatory and compliance consulting;
- preparation of clinical trial and toxicology materials;
- container-closure system design; and
- accelerated and ongoing studies of product stability.
We received ISO (International Organization for Standardization) 9001
certification in June 1996. This certification demonstrates our conformance with
the established international quality management standards for product design,
development, production, inspection and testing. We believe that ISO 9001
certification is important in attracting domestic and international customers.
We intend to provide our services to more pharmaceutical and
biotechnology companies in the future. We believe that increasing our
development and production capabilities will help us achieve this goal. We
have the capacity for these increases in our newly renovated 70,000 square
foot sterile pharmaceutical production facility, which the FDA has inspected.
However, we will need to purchase additional equipment for this facility in
order to expand our services. We do not currently have sufficient funds to
make these equipment purchases.
We believe the following factors allow us to provide competitive,
cost-effective contract services to the pharmaceutical and biopharmaceutical
industries:
- our established experience and expertise;
- ISO 9001 certification;
- increased capacity provided by our facility; and
- our ability to offer a broad range of drug development and
production services.
Our executive offices are at 1111 South Paca Street, Baltimore,
Maryland 21230, and our telephone number is (410) 843-5000.
1
RISK FACTORS
YOU SHOULD CAREFULLY CONSIDER THE FOLLOWING RISKS BEFORE YOU DECIDE
TO BUY OUR COMMON STOCK. OUR BUSINESS, FINANCIAL CONDITION OR OPERATING
RESULTS MAY SUFFER IF ANY OF THE EVENTS DESCRIBED IN THE FOLLOWING RISK
FACTORS ACTUALLY OCCUR. THERE MAY BE ADDITIONAL RISKS THAT WE ARE NOT
CURRENTLY ABLE TO IDENTIFY. THESE RISKS MAY ALSO ADVERSELY AFFECT OUR
BUSINESS, FINANCIAL CONDITION OR OPERATING RESULTS. IF ANY OF THE EVENTS WE
HAVE IDENTIFIED OR THOSE THAT WE CANNOT NOW IDENTIFY OCCUR, THE TRADING PRICE
OF OUR COMMON STOCK COULD DECLINE, AND YOU MAY LOSE ALL OR PART OF THE MONEY
YOU PAID TO BUY OUR COMMON STOCK.
IF WE CANNOT EXPAND OUR PRODUCTION EQUIPMENT, WE MAY NOT BE ABLE TO GROW OUR
BUSINESS.
The equipment we currently use has limited production capacity. Our
existing equipment allows us to conduct only limited production runs. We will
need to acquire manufacturing equipment capable of larger production runs if
we are to increase our customer base. This equipment is very expensive. We do
not currently have a source of funding to acquire it. If we cannot acquire
this equipment, we will not be able to produce products in larger runs.
Therefore, we will not be able to grow our business substantially without
more equipment.
BECAUSE WE CURRENTLY OPERATE UNDER SHORT TERM AGREEMENTS, WE NEED TO MAINTAIN
OR INCREASE THE NUMBERS OF AGREEMENTS WE HAVE.
We receive most of our business under individual purchase orders and
short term agreements with our customers. Therefore, we have no guaranteed or
long-term revenues. We need to continue to successfully negotiate an
increased number of purchase orders and contracts with a larger number of
clients to increase our revenues. If we fail to maintain our current rate of
incoming orders, our revenues and profits will decline. If we fail to obtain
more purchase orders or contracts, we cannot grow our business.
WE FACE SIGNIFICANT COMPETITION FROM PHARMACEUTICAL COMPANIES AND OTHERS.
We compete directly with several pharmaceutical product development
organizations, contract manufacturers of biopharmaceutical products and
university research laboratories. Most companies who produce
biopharmaceutical products do not engage in product development. Most
companies who provide product development services do not have the equipment
or expertise to manufacture products. However, many of our competitors,
particularly large established pharmaceutical and biotechnology companies,
have many more resources than we do. If any of these competitors, or new
ones, decide to provide the same services that we provide at lower prices, we
may be forced to lower our prices or lose business. If this happens, our
revenues and profitability will decrease. Because many of our competitors
have greater financial resources, they would be able to sustain these pricing
pressures better than we could. We are a small company with limited financial
resources. Therefore, we might be forced to go out of business if we face
prolonged price competition.
IF WE FAIL TO MEET GOVERNMENTAL REGULATIONS, WE MAY NOT BE ABLE TO SELL OUR
SERVICES.
We must ensure that our products and services continuously comply
with strict requirements designed to ensure the quality and integrity of
pharmaceutical products. These requirements include the U.S. Federal Food,
Drug and Cosmetic Act and FDA-administered Current Good Manufacturing
Practices (known as cGMP) regulations. These regulations apply to all phases
our business, including the following:
- drug testing and manufacturing;
- record keeping;
- personnel management;
- management and operations of facilities and equipment;
- control of materials, processes and laboratories; and
- packaging, labeling and distribution.
To date, we have been able to comply with these governmental
regulations. However Congress or the FDA could impose stricter regulations in
the future. We have a small staff of persons with FDA expertise.
2
Therefore, we could have difficulty in quickly changing our methods to comply
with stricter regulations. If we fail to comply with the FDA's regulations,
the FDA can disqualify any data we collect in our product development process
and terminate our ongoing research. If we violate the FDA's regulations, we
could face additional regulatory sanctions. In severe cases, the FDA could
close our facilities. If the FDA disqualified our data or closed our
facilities, even for a short period of time, our reputation could be severely
damaged. This would probably make it difficult for us to obtain new purchase
orders and contracts. If we could not obtain new purchase orders and
contracts, we could go out of business.
IF WE ARE FOUND LIABLE FOR ENVIRONMENTAL RISKS AND HAZARDOUS MATERIALS,
DAMAGES MAY EXCEED OUR FINANCIAL RESOURCES.
We use controlled hazardous materials in our production and research
and development processes. We must comply with many laws and regulations
governing the use, manufacture, storage, handling and disposal of these
materials. We may be liable for any damages from contamination or injury
caused by these hazardous materials. This kind of liability could exceed our
financial resources, which could force us to go out of business.
WE MUST COMPLY WITH VERY STRICT ENVIRONMENTAL REGULATIONS WHICH MAY CHANGE
AND BECOME TOO EXPENSIVE FOR US TO CONTINUE OPERATIONS.
We have no control over changes to environmental laws and
regulations. If the government passes new laws and regulations or changes
existing ones, we may have to incur significant expenses to comply with them.
These costs could exceed our available financial resources. If the government
changes existing environmental laws and regulations in a way that
significantly increases our cost to comply with them, we could become
unprofitable and possibly go out of business.
IF OUR CUSTOMERS STOP OUTSOURCING THEIR DEVELOPMENT AND MANUFACTURING, WE
COULD GO OUT OF BUSINESS.
We receive most of our business from customers in the
pharmaceutical, biotechnology and medical device industries who have decided
to outsource their:
- product research and development;
- contract manufacturing of sufficient products to allow clinical
trials and testing; and
- contract manufacturing of products for commercial sale.
The industries our customers operate in may experience economic
declines. This could cause our customers to stop outsourcing their
development, testing and manufacturing. Our customers may also decide to stop
outsourcing some of their activities as a way of reducing their development
or manufacturing costs. If this happens, we would lose a major source of
revenues, and we might have to go out of business.
IF WE CANNOT ATTRACT AND RETAIN HIGHLY QUALIFIED SCIENTIFIC AND MARKETING
PROFESSIONALS, WE MAY NOT BE SUCCESSFUL IN OUR BUSINESS.
We depend on our executive officers and other members of our
management team, as well as our scientists and marketing personnel. To grow
our business, we will need to add highly skilled scientists and marketing
professionals. We face intense competition for highly qualified scientists
and marketing professionals because of a shortage of qualified people. We may
not be able to retain our existing key personnel or attract and retain enough
additional or replacement personnel to support our business. If we cannot, we
may not be able to operate our existing business properly or grow our
business.
IF WE ARE SUED, WE MAY NOT HAVE ENOUGH RESOURCES TO CONTINUE OPERATIONS.
The public uses some of the products we produce even though we do
not market or sell products directly to the public. Therefore, we face
liability for personal injury or death to people who use these products. We
may have to pay substantial damages or incur substantial defense costs in
connection with a claim of personal injury or death. We may not be repaid
under indemnity agreements we have with our customers. Our liability may
exceed the amount of our insurance or our customer's indemnity of us. If this
happens, we may have to go out of business.
3
We currently maintain product liability insurance of only $1,000,000 per
claim and $2,000,000 for all claims in a single year to cover these risks.
IF OUR OPERATING RESULTS AND FINANCIAL PERFORMANCE FLUCTUATE, THE MARKET
PRICE OF OUR COMMON STOCK MAY FLUCTUATE.
Our revenues and operating results have varied substantially from
quarter to quarter during the past several years. For example, we incurred
net losses during all of our 1999 fiscal year and realized net income of only
$111,777 in the first quarter of our 2000 fiscal year. We expect continued
quarterly fluctuations based on such factors as:
- the timing of our customers' beginning, ending or canceling
large contracts with us;
- the timing of our invoices to customers under different contracts;
- when we incur expenses for facilities and equipment; and
- the profit margins from the types of work we perform in any given
quarter.
For these reasons, we believe that you should not rely on quarterly
comparisons of our financial results to predict our future performance. Also,
fluctuations in our quarterly results may affect the market price of our
common stock for reasons unrelated to our longer term potential.
IF WE EXPERIENCE PROBLEMS RELATED TO YEAR 2000 ISSUES, IT COULD ADVERSELY
AFFECT OUR BUSINESS
Many computer systems and software products accept only two-digit
year entries in the date code field. Consequently, on January 1, 2000, these
systems could fail or malfunction because they may not be able to distinguish
21st century dates from 20th century dates. Our computer systems are now Year
2000 certified. However, we cannot be sure our customers' and vendors'
systems will not fail. If this happens, we may be unable to obtain supplies
from our vendors or payment from our customers until the systems are
corrected. This could cause a material disruption in our revenues and cause
our profitability to decrease substantially until our vendors and customers
can correct their systems.
USE OF PROCEEDS
We will not receive any of the proceeds from the sale of the shares
offered by this prospectus. However, we will receive cash upon any exercise
of the warrants described in this prospectus.
SELLING STOCKHOLDERS
The following table identifies the selling stockholders and the
maximum number of shares of common stock each selling stockholder plans to
sell in this offering. We have calculated the beneficial ownership after the
offering by assuming that the selling stockholders converted all of their
shares of preferred stock to common stock, exercised all of their warrants
and sold all shares of common stock covered by this prospectus.
Several of the selling stock holders are affiliated with us. Their
names and relationships with us are: Thomas P. Rice - President and Chief
Executive Officer and a member of the Board of Directors; Harvey L. Miller,
Regis F. Burke - members of the Board of Directors; and Narlin B. Beaty -
Chief Technical Officer and a member of the Board of Directors.
Shares Beneficially Shares Shares Beneficially
Owned Before Offering Offered Owned After Offering
- ------------------------------------------------------------------------------------------------------------------------
Name of Holder/Method of Acquisition Number Percent
- ------------------------------------------------------------------------------------------------------------------------
Corporate Opportunities Fund, L.P. 1................ 945,885 147,427 - *
Corporate Opportunities Fund (Institutional), L.P. 1 945,885 798,458 - *
Howard & Phyllis J. Silverman, JTWROS 1............. 69,933 69,933 - *
4
LAB Partners 1...................................... 69,933 69,933 - *
Thomas P. Rice, President and CEO 2................. 162,500 42,500 120,000 1.8%
Harvey L. Miller, Director 2........................ 102,500 42,500 60,000 *
Regis F. Burke, Director 2 ......................... 73,200 42,500 30,700 *
Michael A. Besche 2 ................................ 42,500 12,500 - *
A.C. Besche Foundation 2............................ 10,000 10,000 - *
Virginia B. Besche Trust 2.......................... 20,000 20,000 - *
G. Grayson Boyce 2 ................................. 42,500 42,500 - *
Narlin B. Beaty, 2
Chief Technical Officer and Director ............... 167,791 12,500 155,291 2.4%
First Union National Bank 3......................... 75,000 75,000 - *
- -------------
* Less than 1%.
1. We sold shares of our Convertible Preferred Stock to Corporate
Opportunities Fund, L.P., Corporate Opportunities Fund (institutional), L.P,
Howard & Phyllis J. Silverman and LAB Partners, on May 10, 1999. If these
investors were to convert their shares of preferred stock into common stock
today, they would receive a total of 1,034,051 shares of common stock. We
also granted warrants to these investors to purchase a total of 51,700 shares
of common stock.
2. We sold a total of 225,000 shares of our common stock to Thomas P. Rice,
Harvey L. Miller, Regis F. Burke, Michael A. Besche, G. Grayson Boyce, A.C.
Besche Foundation, Virginia B. Besche Trust and Narlin B. Beaty, on April 8,
1999.
3. We granted a warrant to First Union National Bank to purchase 75,000
shares of our common stock when we modified the loan agreements we have with
that bank.
PLAN OF DISTRIBUTION
The selling stockholders may offer their shares to the public from
time to time after the date of this prospectus. We anticipate that the
selling stockholders may sell all or a portion of their shares from time to
time through the Nasdaq National Market and to or through one or more
broker-dealers at then current market prices. The selling stockholders may
also make negotiated sales directly or though one or more broker-dealers.
Broker-dealers participating in these types of transactions may receive
compensation in the form of discounts or commissions (including, without
limitation, customary brokerage commissions) from the selling stockholders
effecting such sales. The selling stockholders and any broker-dealers who act
in connection with sales of our common stock may be deemed to be
"underwriters" as that term is defined in the Securities Act of 1933.
The selling stockholders are responsible for all discounts and
selling commissions (if any), fees and expenses of their counsel and other
advisors, and any other expenses they incur by selling their shares. We
agreed to pay the registration fee to the SEC, the listing fee to Nasdaq and
the fees and expenses of our counsel and accountants.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The SEC allows us to "incorporate" into this prospectus information
we periodically file with the SEC in other documents. This means that we can
disclose important information to you by referring to other documents
containing that information. The information may include documents we file
after the date of this prospectus that update and supersede the information
provided in this prospectus. We are incorporating by reference the documents
listed below, except to the extent information in those documents is
different from the information contained in this prospectus, together with
information
5
contained in all future documents we file with the SEC under Sections 13(a),
13(c), 14 or 15(d) of the Securities Exchange Act until the offering of these
securities is completed. The filings are under SEC File No. 001-12748:
(i) Annual Report on Form 10-K for the year ended March 31, 1999;
(ii) Report on Form 8-K filed with the SEC on May 25, 1999;
(iii) Quarterly Report on Form 10-Q for the quarter ended June 30,
1999;
(iv) Definitive Proxy Statement filed on September 14, 1999;
(v) Report on Form 8-K filed with the SEC on September 20, 1999;
(vi) Amendment to Annual Report on Form 10-K/A filed on September 27,
1999; and
(vii) the description of common stock contained in Item 9 of CBL's
Registration Statement S-2, filed April 27, 1997 with the
Commission under the 1933 Act.
You may request a copy of these documents, at no cost, by writing to:
Chesapeake Biological Laboratories, Inc.
1111 South Paca Street
Baltimore, Maryland 21230
Attention: Chief Financial Officer
FORWARD LOOKING STATEMENTS
We have made statements in this prospectus, our Annual Report on
Form 10-K, and other documents that are incorporated by reference into this
prospectus that constitute forward-looking statements, as that term is
defined in the Private Securities Litigation Reform Act of 1995. These
statements are subject to risks and uncertainties. These forward-looking
statements generally are accompanied by words such as "intend," "anticipate,"
"believe," "estimate," "expect," "should," or similar expressions. You should
understand that these forward-looking statements are subject to a number of
assumptions, risks and uncertainties that could cause our actual results to
differ materially from those expressed or implied in the forward-looking
statements. Important factors that could cause actual results to differ
materially from the estimates or projections we make in forward-looking
statements include those described in "Risk Factors."
LEGAL MATTERS
Our counsel, Piper Marbury Rudnick & Wolfe LLP of Baltimore,
Maryland, has given us an opinion that our shares of common stock offered by
this prospectus are duly and validly issued, fully paid and non-assessable.
EXPERTS
Arthur Andersen, LLP, independent public accountants, have audited
the consolidated financial statements of our company at March 31, 1999 and
1998 and for each of the three years in the period ended March 31, 1999,
which we incorporate by reference in this prospectus and registration
statement, as indicated in their reports on the financial statements, which
we also incorporate by reference. We have incorporated these consolidated
financial statements by reference in reliance upon the authority of Arthur
Andersen, LLP as experts in giving those reports.
AVAILABLE INFORMATION
We are subject to the informational requirements of the Securities
Exchange Act of 1934, and file reports, proxy statements and other
information with the SEC, which you should read for additional information
regarding our company. You may obtain copies of those filings from the SEC's
Public Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549, its
regional offices located at 7 World Trade Center, 13th Floor, New York, New
York 10048 and Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661-2511, by calling the SEC at 1-800-SEC-0330, or from the SEC's
Internet web site at http://www.sec.gov.
6
This prospectus is part of a registration statement that we filed
with the SEC. The registration statement contains more information than this
prospectus, including certain exhibits. You can get a copy of the
registration statement from the SEC at the address listed above or from its
web site.
7
===========================================================
WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH INFORMATION DIFFERENT FROM
THAT CONTAINED IN THIS PROSPECTUS. NO ONE MAY SELL THESE SECURITIES UNTIL THE
REGISTRATION STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS
EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL OR A SOLICITATION OF AN OFFER
TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
-----------------------------
TABLE OF CONTENTS
Page
----
Chesapeake Biological Laboratories, Inc.......1
Risk Factors..................................2
Use of Proceeds...............................4
Selling Stockholders..........................4
Plan of Distribution..........................5
Incorporation of Certain
Documents by Reference........................5
Forward Looking Statements....................6
Legal Matters.................................6
Experts.......................................6
Available Information.........................6
===========================================================
===========================================================
1,385,751 SHARES
CHESAPEAKE BIOLOGICAL LABORATORIES, INC.
COMMON STOCK
PROSPECTUS
NOVEMBER __, 1999
===========================================================
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the expenses in connection with this
Registration Statement. CBL will pay all expenses of the offering. All of
such expenses are estimates, other than the filing fees payable to the
Securities and Exchange Commission and the Nasdaq National Market Listing
Fees.
Filing Fee-Securities and Exchange Commission............. $ 963.10
Nasdaq National Market Listing Fees....................... 17,500.00
Fees and Expenses of Counsel.............................. 2,500.00
Miscellaneous Expenses.................................... 3,036.90
----------
TOTAL..................................................... $24,000.00
----------
----------
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 2-418 of the Maryland General Corporation Law permits
indemnification of directors, officers, agents and controlling persons of a
corporation under certain conditions and subject to certain limitations.
CBL's Charter and Bylaws include provisions requiring that CBL indemnify its
directors and officers to the fullest extent permitted by Maryland General
Corporation Law, including circumstances in which indemnification is
otherwise discretionary.
ITEM 16. EXHIBITS.
Exhibit No. Description
3.1 Articles of Amendment and Restatement of the Charter*
+3.2 Articles Supplementary to the Articles of Amendment and
Restatement of the Charter
3.3 Amended and Restated By-Laws dated December 31, 1994**
4.2 Preferred Stock Purchase Agreement dated as of May 20,
1999, by and among CBL and Corporate Opportunities
Fund, L.P., Corporate Opportunities Fund (institutional),
L.P. Howard & Phyllis J Silverman, JTWROS, and LAB
Partners.***
4.3 Common Stock Warrant dated as of May 20, 1999 issued by
CBL to Corporate Opportunities Fund, L.P.***
4.4 Common Stock Warrant dated as of May 20, 1999 issued by
CBL to Corporate Opportunities Fund (institutional), L.P.***
4.5 Common Stock Warrant dated as of May 20, 1999 issued by
CBL to Howard & Phyllis Silverman, JTWROS.***
4.6 Common Stock Warrant dated as of May 20, 1999 issued by
CBL to LAB Partners.***
4.7 Common Stock Purchase Agreement dated as of April 8, 1999
by and among CBL and Thomas P. Rice, Harvey L. Miller,
Regis F. Burke, Michael A. Besche, A.C. Besche Foundation,
Virginia B. Besche Trust, G. Grayson Boyce, and Narlin B.
Beaty.***
+4.8 Common Stock Warrant, dated as of June 11, 1999, between
CBL and First Union National Bank.
4.9 Registration Rights Agreement dated as of May 20, 1999 by
and among CBL and Corporate Opportunities Fund, L.P.,
Corporate Opportunities Fund (institutional), L.P. Howard
& Phyllis J Silverman, JTWROS, and LAB Partners.***
4.10 Registration Rights Agreement dated as of April 8, 1999 by
and among CBL and Thomas P. Rice, Harvey L. Miller, Regis
F. Burke, Michael A. Besche, A.C. Besche Foundation,
Virginia B. Besche Trust, G. Grayson Boyce, and
Narlin B. Beaty.***
+5.1 Opinion of Piper & Marbury L.L.P.
+23.1 Consent of Arthur Andersen, LLP
+23.5 Consent of Piper & Marbury L.L.P. (contained in Exhibit 5.1)
+24.1 Powers of Attorney (included on signature page)
* Incorporated by reference from the Registrant's Registration Statement on
Form S-2 (No. 333-25903).
** Incorporated by reference from CBL's Quarterly Report on Form 10-Q for
the fiscal quarter ended September 30, 1994.
*** Incorporated by reference from CBL's Current Report on Form 8-K filed May
25, 1999.
+ Filed with S-3 filed September 9, 1999
ITEM 17. UNDERTAKINGS.
(a) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy
10
as expressed in the Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suite or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the Registrant
will, unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
(b) The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the
Securities Act of 1933, the information omitted from the form of prospectus
filed as part of this Registration Statement in reliance upon Rule 430A and
contained in a form of prospectus filed by the Registrant pursuant to Rule
424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be
part of this Registration Statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the
Securities Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new Registration Statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(c) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement;
(i) To include any prospectus required by
Section 10(a)(3) of the Securities Act of 1933, as amended (the "Securities
Act");
(ii) To reflect in the prospectus any facts
or events arising after the effective date of the registration statement
(or the most recent post-effective amendment thereof) which, individually or
in the aggregate, represent a fundamental change in the information set forth
in the registration statement;
(iii) To include any material information
with respect to the plan of distribution not previously disclosed in the
registration statement or any material change to such information in
the registration statement;
Provided, however, that paragraphs (a)(1)(i)
and (a)(1)(ii) do not apply if the information required to be included in a
post-effective amendment by those paragraphs in contained in periodic reports
filed by the registrant pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") that are incorporated
by reference in the registration statement.
(2) That for the purpose of determining any liability under
the Securities Act, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities being registered which remain
unsold at the termination of the offering.
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SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant
has duly caused this Amendment No. 2 to the Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in
Baltimore, Maryland, on this 3rd day of November, 1999.
CHESAPEAKE BIOLOGICAL LABORATORIES, INC.
By /s/ Thomas P. Rice
-------------------------------------
President and Chief Executive Officer
/s/ John T. Janssen
-------------------------------------
Chief Financial Officer and Treasurer
Pursuant to the requirements of the Securities Act of 1933, as
amended, this Amendment No. 2 to the Registration Statement has been signed
below by the following persons in the capacities and on the dates indicated.
Signature Title Date
* President and Chief Executive Officer and Director November 3, 1999
- ----------------------
Thomas P. Rice
* Chief Financial Officer and Treasurer November 3, 1999
- ----------------------
John T. Janssen
* Chief Technical Officer and Director November 3, 1999
- ----------------------
Narlin B. Beaty, Ph.D
* Secretary November 3, 1999
- ----------------------
Robert J. Mello
* Director November 3, 1999
- ----------------------
Harvey L. Miller
* Director November 3, 1999
- ----------------------
Regis F. Burke
/S/ THOMAS P. RICE
- ----------------------
* By: Thomas P. Rice Attorney in Fact
12